The Jon Sanchez Show
10/08-What to do if you and your siblings inherit a home
If you and your siblings are on track to one day inherit your parent’s home, you may be in for a bit of a challenge. First a decision needs to be made to either keep the house, rent the house or sell the house. If you choose the selling option, is one sibling going to buy the house or is the house going to sell to the public and proceeds distributed? Join us this afternoon on the Jon Sanchez Show as we discuss this very common dilemma.
- Broadcast on:
- 08 Oct 2024
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- other
How to have fun. Anytime. Anywhere. Step 1. Go to Chumbocassino.com. Chumbocassino.com. Got it. Step 2. Collect your welcome bonus. Come to Topo welcome bonus. Step 3. Play hundreds of casino-style games for free. That's a lot of games. All for free? Step 4. Unleash your excitement. Chumbocassino has been delivering thrills for over a decade, so claim your free welcome bonus now and live the Chumbo life. Visit Chumbocassino.com. BTW Group, no purchases are employed or prohibited by law. See terms and conditions, 18-plus. Good Tuesday afternoon, Gio. Welcome to the John Sanchez Show. One new stock, 780-KOH. It's a pleasure to be with you, and a pleasure to be with our co-host around the horn. We shall travel. Mr. Dwight Millard, synergy. When lending. How you doing, my friend? I'm doing good. John, how are you? I'm doing great. I was thinking about you today, and then definitely after looking where the bond market closed and mortgage rates closed, I'm surprised. I don't hear a bunch of yawns or something. You had one heck of a boring day today, my friend. One heck of a boring day. Of course, the rates, I know you do. Of course, compared to the last 10 days, I'll take the morning, right? Exactly. At least your market give us and take us away. Mine just take us away right now. Right. Yeah. Where's the giving gift? I'm not getting any gifts. I'm not getting any gifts. Oh, my goodness. Yes. We will talk about those rates and that comment. Yeah. That's a very, very good one, my friend. Very good one. A feeling for Corey Edge is his, you know, I mean, what do you say about Aaron Clark of Edge Realty? He is just a man of knowledge, of skill sets, of technology, know-how. You do it all, young man. You do it all. It's great to have you on the back. I should say back on the show. It's been a bit a month or so, if not longer. How you been, my friend? How you been? I've been good. I've been good. Yeah. Thanks for having me. I appreciate it. Love the earlier showtime, too, now. You can get to Oprah on time, can't you? Exactly. That's exactly what I function in life doing. I know, I know, exactly. Well, we figured we had to move the showtime, because we got tired of hearing Corey, you know, doing the show, and hearing the parents scream at the soccer matches, the football games, all that stuff. So we haven't had that since we moved the showtime, Aaron. Yeah, that's good. That's good. Yeah. Instead, he's in the pickup line at the school, waiting first. Yeah, there you go. That's what those honks that we hear in the background are. Thanks for the insight, buddy. Thanks for the insight. How's business been? Pretty good? Yeah, it's been good. Everything's been moving along. So, yeah, it was great. Excellent. Glad to hear it. Well, we always enjoy having you on the show. You know that, Aaron, and there's always so many things that you bring to the table that none of us do. And so, great to have you on board. All right. Let me tell you what we have lined up for you this afternoon. We're, of course, going to go through today's stock market recap. It was a good day today. Finally, we needed this, as Dwight was mentioning. And then in our real estate topic, we're going to move to. Probably get to it relatively fast. I don't have a ton of stuff to go over on the market side. Like I said, not a lot of newsworthy bits of information. But here's the situation, folks. Here's the situation. And if you're not in this situation, or you haven't been, most likely, you probably will be. This is a trend that we see occurring amongst our clients and nationwide. And I'm sure the boys see this among their clients. If you and your siblings are on track to one day inherit your parents' home, you may be in for just a little bit of a challenge that we all experience. Here's what. First, a decision needs to be made whether you're going to keep the house. Second decision, do you decide to rent the house out? Or third decision, do you decide to sell the house? Now, if you're choosing the selling option, is one sibling going to buy the house? Or is the house going to go for sale to the public? And then the proceeds distributed. And then if the proceeds are going to be distributed, how are they going to be distributed? Was it clearly written out into a living trust, right? So this afternoon, what we're going to be going over is, how do we handle this situation? Like I said, we deal with this. Probably, I mean, I can't even tell you, five, six times a year, at least, if not more. We have seen siblings literally have significant arguments about it. We've seen others where it's very clear, cut and dry, thanks to mom and dad having a good living trust, as I said. There's a number of different scenarios and a number of different problems that can occur. We, of course, tonight or this afternoon, we want to help you avoid those problems. Learn about this before it's a situation that you're facing. Aaron, real quickly, how common are you seeing this in your business? How often do you deal with this situation? Well, we've kind of talked in the last year about how since rates went up, we've kind of switched and navigated over to more of the half the cells. And in that category is a lot of death occurring and dealing with probate and trust sales and stuff like that. So I would say this year has been more so than it's been in part of the last many years overall. And not necessarily because there's an increased volume, because the volume is probably about the same, but the focus is more on that. People are holding on to what they don't have to sell, except they have to sell all the net categories. Right, right. Well, you know, I've seen situations again with our clients where, you know, mom and dad, like I said, did a great job with the living trust, but those that did not and then they're leaving it, you know, like you just said, Aaron, they're leaving it up to probate to determine where things are going to go. And then it seems like inevitably, you know, if there's three or more siblings, this seems to be at least in our practice, three or more siblings. Inevitably, one of those siblings does not want to sell the house. The other two, no problem, right? But there's that one sibling. I don't know why the odds work out this way. That one sibling that says, no, either I want to stay in the house, I want to buy the house, or I want to rent the house for my other two siblings, or, you know, let's sell it. But, you know, mom and dad told me I was their favorite child. And so I should get, you know, 40% of their proceeds and the other 30% should be split evenly between the other two siblings. I mean, in the worst thing in the world that can happen is you're dealing with the death of your parents or, you know, probably one parent at that point. You're dealing with that, you're grieving with it, and now you're fighting with your siblings. When again, if a little forethought went into play, you plan this out, or the parents plan this out, all of that can be avoided. And, you know, we've all seen this in living trust. There's many living trust, many attorneys will write a living trust to say, if you dispute, if you dispute, any of you dispute what we have put down on this living trust, you're out of it. You're done. You don't get, I think you get $1, I think legally they have to get $1. And so there's a lot of ways that you can get around this. And again, our goal tonight is to really just lay this out for you and say, look, here's the different scenarios that you may be facing. And most importantly, here's how you plan for them. What about you, Dwight? Same question. How often do you come across this? John, I mean, over the years, quite a bit, actually, because, you know, and it gets really, really messy, even if there is a trust, it gets a little messy, right? Because somebody thinks it's worth this. The problem is not so much with the siblings. It's with the siblings spouses at times. So everybody, everybody wants their opinion in it. You know, and so, I mean, I've had situations where I've ordered three appraisals, you know, just because I've had to get exceptions to get because they're just all arguing about the value and that my value is wrong and this. And so, you know, the timing of this is always, John, you find these planes like you do. I mean, you're going to see more and more to Aaron's point because they're staying in their houses longer because of the rates and the lack of being able to move. So this does present a problem for a lot of people. Or what we run into also, Dwight, to your point, you know, people are going, wait a minute. I, you know, again, one sibling's like, I don't want to sell values are going up. Why don't we want to sell? Why don't we run it out? And then the other two go like, no, I need the money. I need, we need to sell this thing. And then one says, well, you know what? How about if I buy you guys out and then to your point, right? Then here comes multiple appraisals because again, the buyer always thinks that the price is less than what the sellers want for it. And it, oh my gosh, the dynamics, we could do a, you know, multi-hour show on this topic. So it's just, you know, with examples and horror stories. Say that again. I was saying, yeah. And we can do a whole show dedicated to examples and horror stories. Yes. Over the years, because that would be very interesting. You're absolutely right. You're absolutely right. Dwight, go ahead. Well, I was just going to say, when you get that, that one wants to keep and one wants to sell all buy you out, then they start going into, well, if I sold it, you'd have to pay a commission commission, the closing costs are back. I mean, it comes down to the, you know, a $5 bill to get it right and to agree on it. So it does get, I mean, if you've been doing this long enough, you've seen this. Let's complicate the matters further. You just start a few things in my memory. Dwight, how about this one? Mom and Dad died. Let's say the last parent died, let's say a year ago, right? And the family has taken a while to settle the estate. And so the house has gone up in value. Now what do you do? Right now you've got capital gains taxes, potentially, in this example. Let's say the house was worth, you know, $500,000. And of course, Aaron, as you know this, people don't do what they're supposed to do, which is get an appraisal done within 90 days of death. And so, yep. So, you know, here's, here we are a year later. And then, you know, they hire an appraiser to try to get an appraisal done and say, what was the value at the date of death to establish the cost basis on the property? That creates a whole nother problem. And then guys, you know, I'm going to make this matter even worse. Let's throw in, because usually people that will have a painful house, they probably have some investments. So guess what? Same exact scenario that we're describing tonight or this afternoon. On the real estate side, the same exact thing happens on the stock market side. So they have a stock market portfolio, meaning the last parent does. And guess what? It's taken a year to get this thing settled. Now what do you do? Oh, of course, one of those children, you're probably going to be the executor of the estate. Then you get the other two. You get the other two going, look at the investments are worth 10% less today than they were when mom died. She was the last one to die. And therefore, you are responsible for making up the difference. I've seen that one happen. I mean, it's just, you just let your imagination, your imagination wonder. Good. Yeah. And John and throwing attorney on one of the parties, and it's all over, right? Oh, yeah. Oh, yeah. Once retained. Somebody retains an attorney and everybody's going to go find an attorney. Now you've got spouses, siblings, attorneys, you know, hairdressers, you got everybody. So it's, it is very complicated. So it's a good topic to at least be mindful of, right? That's right. That's the goal. We're all mortal. And it comes at some point in time. And as I mean, you and I, we're seeing our parents age in things and, you know, yeah. Yeah. Yeah. Well, you know, and then you, you throw in the situation, which is very common nowadays. You may not realize this folks, but it's very common. Adult children, right? They never move out. So they were living with mom up into her last day to death. And therefore again, the other siblings are going, hey, we want to cash this thing out. And the one that's been living there for, you know, his or her whole life goes, wait a minute. This is my home. What do you want to, what do you mean you want to, you know, sell it? Where am I going to go? And then you start a problem and you know, I don't care what you're going to do. You're a grown adult. You shouldn't have lived with mom for your entire life, but that folks is very, very common these days. Especially, you know, as we've discussed many times, you get at that final parent that's in poor health. You don't want to put them in an assisted living facility. So one of the children will move home. Now let's throw another situation that I've dealt with many times. And that is, you know, let's say it's a, you know, 55 year old daughter, she's moved home to take care of mom. Mom's the last surviving parent and she feels that she is owed more of the proceeds or even owed the house because she has given up her life. She's given up her career. This happened with one woman's, I'm talking from real life. She gave up her career to move home to take care of mom for the last two years. Mom dies and she's like, wait a minute, I shouldn't get a third of this. I should get more because I took care of mom. And then the other siblings come back and go, yeah, but she had a roof over your head for free. Right? Yeah. It just goes on and on and on. So we're going to get the picture folks. Yes. Yes. Absolutely. We're now late for the first important event of the show. And that of course is Kristin Snow in the right now, traffic center. Hi, Kristin. Welcome back to the John Sanchez show on his talks, 780 KOH with our very special guest this afternoon. Aaron Clark of edge reality. And of course, Dwight Millard of synergy, one lending. All right. Here's how we finished up for the day. A 126 gain on the Dow 0.30 percent. We closed up 42,080. The NASDAQ gained 259 points, 1.45 percent closing level 18,182 S&P at 55 or 0.97 percent close today at 5,751. If I had to summarize today's activity, I would say it was by the dip mentality. What a difference, of course, compared to yesterday where the world is panicked about everything from the hurricanes, of course, to the situations in Israel today. Like I said, it was more the by the dip mentality. If you folks have been watching and following the hurricane situation, you know, they downgraded it to a cap for earlier today. But as of an hour ago, it's been upgraded to a cap five, but even the insurance stocks, which, you know, fell apart yesterday. I mean, many of them were down over 10 percent. They all rebounded. Just checked. Allstate finished up about about $62, travelers up $4.37, Chubb up $2.78 and AIG gaining $1.06. When that was a very strong performer yesterday, Generac, the generator company, of course, actually fell a bit today down $1.32. But they also came in and bought the heck out of the major tech names. Apple was a strong performer with a $3.70 rise. $4.55.39. We had a video of another star performer. It was a strong yesterday, even though we had a week take today. We saw a video rise of $4 right now in the after hours, we're at $4.95, 3.88 percent gained to $1.32.76, Amazon up above $54, met up to $7.70. So it was a, like I said, by the dip type of mentality, which was quite surprising, but very much welcomed. On the commodity side, it was a big day also for oil prices pulling back, haven't said that in a while. $4.5 percent lost on oil, $73.70 a barrel, gold give up $30.60, close to $2,635.40, and Mr. Marlargest on one basis point increase on the 10-year to yield close of $4.03. How substantial is this been with mortgage rates? Now we're back above 4 percent on the 10-year. Yeah. So let me, you know, and again, at least I'm glad we were flat today, basically. But I did, I went back a little bit in time, basically just three weeks ago. So three weeks ago, the mortgage news daily average rate on a 30-year was 6.17. Today, it's 6.62. Okay. So that's a half a point, basically, John, in rate, in rate, in rate, you know? And the 15-year was it on September 9th, again, just over three weeks ago, was 5.64. Today, it's 6.15, so I mean, this is what the government did. And I go back to my comment, and anybody can listen to it the Tuesday before the Wednesday, why are they doing this? They don't need to do this. And then, of course, they did it, and people are just, John, they're completely lost to why rates are up, you know? And it just frustrates the consumer beyond frustration, you know? So, you know, I hope that, you know, you've got some big numbers coming out this week, right? CPI and PPI. I don't know. Do you see any settling down of interest rates than that? No, I really don't. Everything that we are seeing, hearing, et cetera, all the indicators are showing that 4% is going to be there. It is now the new floor and the new support and moving higher from there. I wouldn't say substantial. I think we're going to be in a pretty tight trading range, probably between 4 to maybe 0.15, you know, as far as the 10 years concerned. So, I think the worst is over for you, Dwight, but I don't, I would not anticipate any type of a pullback, I guess, you know, wish I could say that, but nothing in the cards is showing that. I think we're going to see the, you know, relatively benign CPI and PPI numbers. As you mentioned, we get CPI on Thursday. If I remember correctly, PPI is on Friday. We've got some Fed minutes coming out tomorrow, which also could give us some insight as to what the Fed is thinking. But, you know, you have Mr. Powell to thank for this, Dwight, a couple of days ago, again, saying, you know, half a percent is pretty much all you guys can expect, meaning the street, you know, for the rest of the year. So, as soon as those words were uttered, like I said, it just changed everything at that point. And so... Well, you know what happened, John, is people were waiting to lock loans, so after the Fed's made the announcement, then they got battered and thought, well, this can't last. They got battered again, and, you know, it just continued to go up, so people really got frustrated in that position of thinking they were going to get something on the half a point when, in fact, it did the opposite. But I wanted to mention something. John, did you see that article, the average insurance policy in Florida? Have you seen that? Yes. Yes. Per month is $1,000 a month. $1,000 a month is the average homeowners insurance policy in Florida. $12,000 a year. That is absolutely amazing. And it was up. I'm going off a memory here. I think they said the rates were up, what, 20% in the last year? I think... Yeah. Yeah. Yeah. I mean... And on the increase again, how... You know... That's just housing. That's all mentioning auto. Yeah. Right. Well, and if they mention your higher interest rate, you know, and increase in tax, I mean, it's just becoming really, really difficult. And I don't know, you know, we can ask, Aaron, is that the reason why we're starting to see more for sale signs is just the cost of living, just starting to beat people down. Yeah. Aaron, I want to bring you in on the fold on this, and I want to do a little hypothetical. And that is, if you were a real estate agent in, let's say, the Florida area, right? And you're reading story after story, but again, it's the news, so take it for a green assault. But a lot of people are now going, especially people that have transplanted, they're going, "I'm out of here. I can't do this anymore." You know, especially this poor situation where they're going to have their second hurricane in the last two weeks, but to Dwight's point, the cost of living there. So could that have a national impact as, you know, if we see prices start to soften in that area, or do you think this is just a bloop? I think it's going to be pretty isolated to that area, and people that are fine there. It's not like, you know, like we have our disclosures here for different things. California has their disclosures over earthquakes. In Florida, they have disclosures there about hurricanes, and there it's not if you get hit by a hurricane, it's when you get hit by a hurricane. So just like you buy a house here and take a consideration of what your HOA is going to be if you're in a nice clubhouse neighborhood, right, there, you're doing the same. If you're buying in an area that's highly likely to be impacted by storm surging things like that. So it's all kind of part of the crux of what you're getting into what you buy out there. Yeah. That's a good point. Yeah, I mentioned this on the show yesterday, my in-laws live in Florida. They also live in Michigan where they are right now, and they've been checking with their friends. They live in an RV park, and yeah, I mean, people are just freaked out. They're still cleaning up literally from last storm as everybody reads about, but I heard it firsthand, and yeah, they're scared to death. It's scared to death. People are just getting wiped out, literally wiped out. And again, I read some interesting articles like on Wall Street Journal and Bloomberg Businesses, as we all know. They now, what do they call Florida, now with the something Wall Street South or something like that. And a lot of these businesses are really saying, you know, do we make the right move moving our firms out of New York City, which has its share of problems to Florida and dealing with these type of things. So it's easy to again, to speculate when times are tough like this, but it's obviously a very beautiful area, no taxes, et cetera, but yeah, it'd be interesting to see. And the other thing too, guys, we got to factor in. We'll see what kind of economic impact both of these storms, Helene and now Milton, are going to have on jobs and GDP and so on, so forth going forward. Agriculture is, yeah. Yeah, agriculture. Yep. Great point, Aaron. Great point. All right, guys. Well, now up to date on the stock market side of things. Let's get ready for our real estate topic when we come back. What to do if you and your siblings inherit a home? That'll be our topic and we've got some great information for you. But first, let's get some other great information from Mr. Greg Neff. He's got news, traffic and weather. Hey, Greg. Beautiful. Thanks, Greg. Appreciate that update. That's great to know. Yeah. I was wondering, it's like, okay, where's he going to be? Excellent job, my friend. Excellent job. All right, we finished up 126 on the Dow, 259 gain on the NASDAQ up 55 on the S&P 500. Now, let's bring the boys into the fold. Let's talk about the situation where what are you going to do if you and your siblings inherit your, most likely your parents, so they can inherit any home. I deal with this with all different relatives, from grandmas and, you know, leaving the house to a grandchild, so on and so forth. All the rules are still going to apply. So we've kind of narrowed this down. We're going to try to hustle through about eight bullet points that we want to hit on. So Aaron, let's start with you. First one, of course, we sell the home and split the proceeds. Lord knows that would be the simplest of all things. Rarely does that happen, but walk through that scenario, you know, just selling a splitter. Sure. I mean, that would be the best case scenario because, you know, you, you put the home on the market. It's susceptible to what the fair market value will obtain regardless of an appraisal. What buyers are actually going to pay for it. And then, you know, on completion, everything gets split up equally based upon, you know, the trust and how it reads or if we have to go through probate, which we think that's probably a whole nother show. But if we have to go through probate, then those will get verified and then distributed as well. Beautiful. While we're on the subject, Aaron, let's talk a little bit about, because this whole apply to some of our other scenarios, we'll go over the capital gains side of things. Yeah. So, you know, always we tell everybody when you're dealing with a situation like this, you should consult the CPA and my attorney and whatever to figure out what the taxes are going to be. But capital gains are going to be based upon the time of death in which the owners pass away. If you have, which happens all the time, let's say you have a husband and a wife and husband died 10 years ago, and wife still lives in the property, and then she died six months ago, you're going to have the step up basis, which is a detail in itself. But basically, you're going to be able to look at the value of the home from when the husband died. He gets an exemption amount, I believe it's $250,000 per person to be 500 total, but it's based upon the time value of the property when he passed. And then again, the time value of the property when she passed, that's where you need a CPA. Absolutely. And so whatever that value, that's why it's so very important, the point out to Aaron's great advice, the point I want to emphasize here, make sure that you, if you're going to inherit a property, you get an appraisal done. First of all, you hire Aaron or Corey to represent you. They will make sure that you get an appraisal done right away. You want to get it done as quickly as possible right after the death because that will establish that new cost basis. And then if it takes you three months, six months, a year, whatever it is, to sell it, the difference between what that appraisal came in at, at the time of death, to Aaron's point, the stepped up basis. So the value at the time of death, to what it's sold for, unless your expenses to sell the property, that's the capital gains. And I've seen this happen, Aaron, where they didn't do that. Like I said, the beginning of the show, they wait too long. It's hard to establish what that value was. And then here comes the tax bill, and then everyone goes, oh, sorry, I already spent my proceeds, brother and sister, I can't pay the capital gains tax. And remember, folks, not only is it going to be the federal capital gains tax, but if you're selling properties in California or any other state where there's a state capital gains tax, you owe that one also. And then to Aaron's point, we can do a whole other show on this one, whole different scenario if you're selling an investment property. Now you've got depreciation recapture, you don't get the stepped up basis per se. I mean, there's a whole another set of problems there. So if you have investment properties, you're going to inherit it. Once again, reach out to one of us, and we kind of walk you through the scenarios. But yeah, we could do multi-action. Yeah. And I would say nine out of 10 times, believe it or not, most people spend the money before anything's done. They do. They absolutely do. You may not realize that tax bill till a way later, so not prepared on the front end. And you've decided you're going to finance something or go on that dream vacation and put it on the credit card and all that kind of stuff, you're going to be hurting. I've heard this. Mom wanted me to go and enjoy the money. So I spent it. I heard that all the time. Yep. That's going to be the slogan of everything. It really should be. Yeah. In the meantime, Mom's looking down from heaven going, "I did not tell you that. You're lying." Yeah. All right. Dwight, let's go to the second scenario. One sibling buys one out. Therefore, they contact you as the lender and go, "Hey, you know what?" Sister, how do we do this? Yes. You know, this is the one exception, John, on conventional financing that they allow per the instructions of the trustee or the executor gets to actually take cash out, you know, and you can utilize the cash out to pay those siblings off. So I mean, it's, you know, but like anything else, it's standard qualifying, you know, to cash out, refinance or whatever, you know, that typically is the way it goes. And so it gets a little muddy, but they usually can work it out when they finally reach a number. But a lot of times they'll wait until we actually get our appraisal, which is a little strange, you know, because it's kind of, but to establish then what that, what looks like or what the buyout looks like. And the more, the more, the more hands in the pot, the more comfortable we could get. Yes. Yes. Yeah. Yeah. And especially if one of those hands is, again, used, it's one of the siblings who is also the executor making that final legal decision based upon the trust document and what the wishes were of the trust, right, or of the former trustees of it. So yeah, that's where it gets interesting. And then the final point, and I want to throw in my two cents on this one is you got to be very careful. So mom and dad, grandma, grandpa, when you're writing your trust, make it as clear as possible, as clear as possible, what happens under these scenarios we're talking about. One sibling decides to buy the other one out. And heavily one, one sibling and I run across this one sibling seems to be financially hurting. The other two are in pretty good shape, right? So the other two can wait. Well, the one that's hurting goes, hey, you know, you guys are screwing around waiting to sell this house. I need the money now. And I've seen it where the two financially well-off siblings are going, hey, you know, what, we'll buy you out brother for, you know, 30 cents on the dollar. And sometimes they take it. Sometimes they don't. So right, Aaron, you can get any negotiations with your siblings. And sometimes they obviously, they cannot end well in a lot of cases. So the clear mom and dad, grandma, grandpa, you can make it in your trust as to what you want to do. You can set the rules. Okay. If one sibling is going to buy the other one out, you get an appraisal and boom. There it is. But boy, oh boy, again, in time is of the essence. I cannot stress that. You know, and John, it's important to make a note too, is that if that, if there is alone on it or it's a reverse mortgage, it even gets a little more complicated. So just really, really know what you have, what they have because it's a reverse mortgage to hold different animals. You bet. You bet. Um, Aaron, let's, uh, let's squeeze in real quickly here, point number three, the co-ownership and renting the property. Yeah. So we have a lot of people to do this, especially with luxury property. So house and pothoke happen, something like that. Um, in these situations, it's where you're going to want to get the attorney involved. But typically what you would do is form some sort of an LLC, the LLC, then sort of runs the rental property and then with the LLC, you hire a property management company and then all the proceeds go into the LLC. And then basically everybody gets a check, a check, this cut monthly, all expenses come out of that. Everybody's fair. Again, everybody has to agree. Everybody has to pay the pricing, et cetera. So assuming everybody's on the same page, it's a pretty common practice, um, but where you get tied up and not on this one is you got one person who wants to turn the property that, you know, built in the early 1900s, have been this beautiful and worth a million and a half in Tahoe and they want to, you know, turn it into Taj Mahal, where someone else is like, no, let's just rent it as is because I don't have any money, you know, so get into those types of situations. And then you get people where they're like, Oh, well, let's take out a loan to pay for those repairs and throw that into the whole deal so they can get a little picky. Or if two out of the three or one out of the two says, Oh, by the way, this thing needs a new roof. You both need to come up 50% of the cost of this new $20,000 roof. Well, I don't have the $10,000. Well, guess what? I'm going to be deducted from your value and you go down that whole path. So once again, clear, written documentation of how this is going to work. Excellent point, Aaron. All right, we're going to come back with a point number four, which is what happens if one of the siblings want to live in the house. So I'm up with Kristen Snow. She's in the right now traffic center. Hey, Kristen. Welcome back to the John Sanchez show when he's talking 780 KOH, Mr. Aaron Clark of agility. Remember, sir, six, seven, three, six, seven hundred. Thank you so much. Do I have a large synergy when lending fun number two, four, zero, two, zero, two, two. Thank you fellows. Appreciate it. All right. We've been discussing what to do if you and your siblings inherit a home. Let's recap it quickly. Sell the home and split the proceeds, right? Easiest, simplest, but rarely does that happen. Second scenario. One sibling buys out the other. The third scenario, KOH ownership, and you decide to rent the property out. The fourth one, very common. And once again, we see this in many situations. One of the siblings wants to live there. The others are like, what about me? How do I get some of my equity out, so on and so forth? Take it from there. Do I? Yeah. I mean, that's, that's, that's going to have to kind of come maybe in a rent formula, don't you think John? I mean, I mean, you're going to stay in the house and they're going to have to try to what? Huh? I'm sorry to interrupt you. I said, I've seen different scenarios. I've never seen the one you just mentioned where you're paying right to your siblings. What I have seen, and again, this comes down to, well, let's just use three siblings. Two of them are financially well off. The one that's, you know, living in the house is usually the one that's not. Otherwise, they don't in their own place. But I've seen it where the other two siblings are, or where they say, all right, we're staying on the title of this property. But when you go to sell it and you have five years, 10 years to sell this property, then we get to share in the appreciation. So that's what I've experienced. I'm sorry to explain. Yeah. And you're right, it can get very complicated. But I've seen most of the way that I've seen when somebody wants to stay in it, they create a rent agreement, then they'll decide if they want to charge them or not charge them. But to your point, then it goes against the distribution at some point in time, you know, they get a discounted amount or something. But you're absolutely correct. Generally out of the siblings, one is struggling. And that's going to be the one that wants to force something. Yes. And the one that stays there. And then again, I want to be your company. If I'm that child that stayed there, I want to be compensated for the time I took care of mom in her final years or whether that one's a messy one. Dwight, I'm going to stay with you. Let's go to point number five quickly, a refinance the property. This can be really interesting. You want to pay off those siblings and buy them out. How do we do that? Yeah. And as long as you can qualify, generally, you know, what I mostly see is that whoever is buying them without it, they're treated as probably an investment product. It's a property because they already have a house they're living somewhere, not always the case. So if you go, if you're moving into it, then you are occupied, but all you're doing is a cash out refinance for the instructions of the trust and or the, you know, the trusty of the executive of the state and it's pretty simple. They, you know, they, you know, a lot, again, a lot of times they wait till I get the appraisal to determine the amount of which the, what the total cash out will be. Sure. Okay. Perfect. A little legal here, partitioning the property, meaning legal action, not the way we want to go, but it happens quite frequently. It ends a lot, actually. Yeah. So a lot of these times you can get into a situation where people just don't agree and it's kind of similar to a divorce, you know, one spouse wants to keep house. The other one says over my dead body, are you going to live in the house that we built together? So the attorney can force the sale and just keep it as clean and crisp as possible, but it does involve getting an attorney, usually breaks relationships, you know, so all of these things can be avoided by just get a trust, get a trust. If you own a home, get a trust, even if you're a young, get a trust in every one of these scenarios, myself and Corey have dealt with so we can help anyone out. That means helping. Love it. Love it. Our seventh point was the tax consideration. We talked about that again. The capital gains taxes, the stepped up basis. Once again, make sure you bring your team together, get an attorney, get a CPA to handle that. This one, again, the estate documents that Terrence point, you just, it's where it all all comes together, where it's all created, where it all comes together. So once again, mom and dad, grandma, grandpa, if you're going to pass on your house to your siblings or to your children, please make sure you've got a solid estate plan. If you need any referrals on that, we'd be more than happy to help you out there also. If you missed anything, don't forget you can pick up our podcast, any of your favorite podcast distributors. Great job, fellas. We'll see you tomorrow night, everybody. God bless. This program was sponsored by Sanchez Wealth Management. The material in this program was intended as general information only and should not be taken as specific investment tax or legal advice. None of the information on this broadcast was intended to be a solicitation for the purchase or sale of any security. Further information is available by contacting john@sansheswealthmanagement.com or 775-801-01. John Sanchez offers securities and advisory services through independent financial group LLC, a registered broker dealer and investment advisor. Member FINRA SIPC, securities only offered in states, John Sanchez is registered in. Sanchez Wealth Management, LLC and independent financial group, LLC are unaffiliated entities. Synergy One Lending Equal Housing Opportunity, NMLS #1907235, Dwight Millard, NMLS #241259, phone number 775240222. The information provided today is for educational purposes only. The position strategies or opinions of the show do not necessarily represent the position strategies or opinions of Synergy One Lending or its affiliates. All information loan programs, interest rates, terms and conditions are subject to change without notice. Synergy One Lending offers home loan financing only. Synergy One Lending is not affiliated with the John Sanchez show. 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